Daily Management Review

Fast Action on EU Trade Terms Urged by London's Financial District


07/06/2016




Fast Action on EU Trade Terms Urged by London's Financial District
The head of London's financial district said that in order to preserve the City of London's dominance in financial services after last month's vote to leave the European Union, Britain should move quickly to keep investment flowing.
 
Through the process of maintaining so-called passporting rights after Britain leaves the bloc, it must protect access to the EU's single market, said Jeffrey Mountevans, Lord Mayor of London.
 
Under a passport system that give access to the single market if they comply with all the bloc's regulations forms the basis of serving customers across the EU for banks, asset managers and clearing houses in Britain at present.
 
However post Brexit where UK would have to negotiate new terms and conditions with the EU, it is unclear if any passporting rights will be maintained in the negotiated new trading terms. A large chunk of the European market could be left out or get out of reach for banks in Britain without any form of passporting rights.
 
"It is in all our interests to protect access to the single market, protect the UK's flexible labor market, protect the City's passporting rights. We all hope that the UK government will act swiftly to ensure continued investment in this country – and continued competitiveness for our international firms," Mountevans will say later on Wednesday in a speech made available to the media.
 
Lawyers and accountants, luxury property and shopping, quality private education and a wider cultural renaissance unmatched in Europe is offered by London apart from providing by far the deepest pool of capital in the time zone between Asia and the United States.
 
London's prosperity could be put under threat, many fear, by the Brexit vote and the turmoil it has unleashed.
  
Allowing EU citizens to live and work in the UK, an anathema to many of the British politicians and voters who backed Brexit is the precondition that Brussels insists on to maintain passporting rights for Britain and therefore for its banking and financial sector.
 
The City of London had campaigned to stay in the EU. It is a municipal authority that administers the capital's "square mile" financial district.
 
With London the headquarters for four of the 10 biggest global law firms, there can be a potential knock on effects from Brexit on sectors that support financial services, Mountevans also pointed out.
 
Banks will move to their financial centers in order to remain inside the single market, hopes France, Germany and the Netherlands.
 
Once a new UK prime minister has been chosen in September, Britain will begin formulating the new trading terms it seeks. And the financial industry must have a say in those negotiations, Mountevans said.
 
"We need early and extensive consultation on the way forward – drawing on the expertise of UK financial, professional and business services," he said.
 
(Source:www.reuters.com) 






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